Tuesday, October 19, 2010

CIL IPO subscribed 1.7 times on day two

MUMBAI: The Coal India IPO, the largest in the Indian history that is estimated to mobilize nearly Rs 15,500 crore, was oversubscribed on the second day of the offering itself with the total demand already worth over Rs 26,000 crore now.

NSE data showed that compared to 63.2 crore shares that the government is selling in the Coal India offer , total bids were for over 108 crore shares, an oversubscription of 1.7 times. Of these, bids for more than 107 crore shares were at the upper end of the Rs 225-245 price band. On the first day of the issue, subscription was 34%. The subscription for institutional players will close on Wednesday and for other investors on Thursday.

The institutional part of the offer was subscribed 3.4 times the 28.4 crore shares on offer for this group, while the non-institutional part, which include high networth and corporate investors , was subscribed 54% (that is 0.54 times) and the retail part was subscribed 35%, NSE data showed. Institutional dealers said most of the money under the institutional category came from foreign funds, which have already put in nearly $24 billion , a new record, into the Indian stock market so far this year.

Almost all the broking houses that have come out with reports on the IPO have given a "subscribe" rating to the offering, since most believe there is an upside to the stock price at the time of listing and thereafter.

The IPO for the world's largest coal producer is part of the government's larger divestment programme.

Read more: CIL IPO subscribed 1.7 times on day two - The Times of India http://timesofindia.indiatimes.com/business/india-business/CIL-IPO-subscribed-17-times-on-day-two/articleshow/6778325.cms#ixzz12rsfPcN3

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